Government in the United States, National, State and LocalGarner, James Wilford
History
Government in the United States, National, State and Local
Garner, James Wilford
United States -- Politics and government
_Demonetization of the Silver Dollar._--But soon the increase in the
supply of gold again disturbed the ratio, making the silver coins worth
more as metal than as money; and as the difficulty of keeping up the
adjustment seemed insuperable, Congress decided to abandon the attempt
and so in 1873 the silver dollar was practically "demonetized," that is,
was dropped from the list of coins, and other silver coins were made
subsidiary, that is, their weight was decreased so that the metal in
them was worth less than their face value, and they were made legal
tender for small sums only.[40]
[40] At the present time all gold coins and the silver dollar are legal
tender for all sums. The smaller coins, however, are legal tender for
small sums only, the amount ranging from twenty-five cents in the case
of the nickel and copper pieces to $10 in the case of the silver coins.
_Later Acts._--The opposition to the demonetization of the silver
dollar, however, became so great that it was restored by the act of
1878 and made full legal tender. But the free coinage of silver was not
restored; the act required the government to purchase and coin not less
than $2,000,000 nor more than $4,000,000 worth of silver bullion per
month. In the mean time the market value of silver had declined until
the amount of silver in a silver dollar was worth less than eighty cents
in gold, and it was believed that the act of 1878 by increasing the
demand for silver would restore its market value. This, however, did not
happen, and the market value of silver went on decreasing until at one
time the amount of silver in a dollar was worth only about forty-six
cents in gold. In 1890 Congress increased the use of silver by requiring
the secretary of the treasury to purchase monthly four and one half
million ounces of silver and pay for it with treasury notes which were
redeemable in coin at the option of the secretary and which were to be
canceled or destroyed when so redeemed. This act was repealed in 1893,
since which date the government has purchased very little silver bullion
for coinage purposes.
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